Rocky Mountain Chocolate Factory has moved consumer packing operations – something that employs 15 to 50 employees depending on the time of year – from its Durango location to a third-party packaging operation in Salt Lake City.

“This co-packer will now handle all of the final assembly of our boxed and toted chocolates, fulfilling a critical need within our simplify and focus strategic objective,” CEO Rob Sarlls announced last week during a conference call.

Sarlls said labor availability in Durango has been a challenge and the intensive nature of Rocky Mountain’s packaging process requires a certain amount of laborers.

Labor shortages have impacted Southwest Colorado and other areas across the United States.

The U.S. Chamber of Commerce reports that roughly 30.5 million workers left their jobs as of August 2023, which is considerably better than the 50.7 million in 2022. According the U.S. chamber’s America Works Data, hiring rates are still outpacing resignation rates on a national level. Manufacturing is one of industries in which resignation rates are among the lowest at 1.7%.

But the outsourcing fits in with Rocky Mountain Chocolate Factory’s emphasis on accelerating long-term growth. Using a co-packer will ensure packaging capacity aligns with volume increases.

In May, the company announced it would cut less-popular products and improving its production processes. This would included using third-party services to avoid work volume outweighing employee bandwidth.

Packaging in Durango typically took anywhere between 15 and 50 employees to accommodate the demand of packaging RMCF’s products, Sarlls said.

In a later interview, Sarlls said the number of employees needed to do packaging varies depending on the time of the year. During the holiday season, the factory needed the more employees in the packaging departments.

Sarlls said typically La Plata County has a low unemployment rate and recent trends weren’t necessarily out of the ordinary. In September 2023, the unemployment rate reached 2.9%, which is just below the 3.2% state average.

The outlook indicates that the struggle to find labor may be a result of strong labor force participation, meaning there are fewer people looking for work.

Nonetheless, the chocolate company still tried to incentivize workers to apply by increasing wages.

“We had a particularly tough year with labor in 2023 – such that we were frequently deploying chocolate manufacturing talent to fill and complete boxed chocolate needs,” Sarlls said. “This not only reduced our availability to fully meet seasonal holiday production requirements, but also impacted our ability to capitalize on new business opportunities, including e-commerce.”

Sarlls said it was difficult to move on from where the company started but it was a needed transition. It came with relocation costs, including additional transportation and expedited production costs to prioritize delivery of inventory.

“Despite the short-term impact, we are pleased with the net result of the packaging move to Utah, and I'm proud of the hard work by our operations and supply chain team to facilitate this relocation effort in the midst of our busiest season,” Sarlls said. “As a consequence, we've eliminated the long-standing production ceiling we faced in Durango, and this move has created substantial additional capacity to meet future demand.”

During the call, Sarlls alluded to what production efforts looked like for the current fiscal year, saying the Durango factory produced 50% more product than the year prior.

He later said the company is trying to ramp up production in Durango and intends to make up for the loss of employment opportunities in the packaging sector by adding more employees to the production team.

“With Salt Lake, we've got functionally no ceiling to the number of packaging hands we can get on finishing our boxes, and that gives us tremendous opportunity to go after more box business – not just to better supply our franchisee network, but also our omnichannel customer efforts and e-commerce,” Sarlls said. “We intend to increase production in Durango and hire more people.”

The long-term goal is to double production at the Durango location.

Durango Chamber of Commerce CEO Jack Llewellyn said all Durango employers are feeling impact of the labor shortage. He said the issue is multifaceted and a national trend that isn’t unique to Durango.

“There's so many jobs available. You still see a lot of restaurants that aren't opened up on Sundays or Mondays – El Moro is closing for lunch and it's all labor-related,” Llewelyn said.

It is hard for Llewellyn to believe that wages would be the reason why workers are deterred from working in Durango, as many businesses have increased their wages to over $20 per hour.

Llewellyn points the finger toward the lasting impacts of the COVID-19 pandemic where he says much of the area’s workforce left.

“Especially women, they did not enter back into the workforce. They decided to stay at home,” Llewellyn said.

According to a 2023 survey conducted by ResumeBuilder.com, 35% of women who became unemployed during the pandemic haven’t returned to the workforce.

He also points out that younger generations are having fewer children which significantly shrinks the workforce. A 2021 poll by Pew Research found 44% of adults without children said they're unlikely to have children.

But he says there is optimism around what Durango School District 9-R is trying to do with the Impact Career Innovation Center and Career and Technical Education, especially as it pertains to the trades.

He said graduating from high school with the skills gained from CTE classes are a step in the right direction.

tbrown@durangoherald.com